P.M.: ‘We’re not doing too badly’

Press, 28 May 1984, Page 9

P.M.: ‘We’re not doing too badly’

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KARREN BEANLAND

Political reporter The up-turn in the economy at the moment was not an election year boom, said the Prime Minister, Sir Robert Muldoon, in Nelson on Saturday. Speaking at the Canter-bury-Westland divisional conference of the National Party, Sir Robert said that there had been an up-turn because the tax changes in the 1982 Budget and the major “Think Big” projects were finally having an impact on the economy. New Zealand had been in a recession since the 1973 oil shock, while other countries had suffered only “ups and downs,” yet the Government had managed to maintain the standard of living. Sir Robert said that the economy was doing well compared with countries in the European Economic Community. New Zealand’s economic growth rate, which would be about 2 per cent this year, was not as high as the E.E.C., but New Zealand was doing better in inflation and unemployment, “the things that the public see.” The unemployment rate was about 6.8 per cent.

Inflation was running about 3.5 per cent, although it would be about 5 per cent by the end of the year, he said. According to figures published in “The Times” newspaper of London recently, E.E.C. countries had up to 13.2 per cent unemployment and 20.9 per cent inflation. The unemployment and inflation figures were lower than any of the E.E.C. countries except Greece, which had only 1.9 per cent unemployment. "We are not doing too badly. The freeze in fact worked,” Sir Robert said. “We have squeezed out inflationary expectations to a considerable extent. We have got entrepreneurs looking at price increases in line with the present level of inflation, not with 15 per cent any longer. We have got supermarket chains saying they will hold prices until the end of June,” he said. The Government recently moved to bring interest rates down in line with the inflation rate. They had to come down because they were the biggest cost to home owners, businesses, and farmers.

The rates were dropping, but not quickly enough because many financial executives were saying that they would wait until the Government regulated. The public wanted a reduction in interest rates, just as it wanted the reduction in inflation, he said. Many people were not worried about wage increases, provided prices were kept steady. Sir Robert said that the Government had antagonised many pressure groups and done many “terrible things” to bring the economy under control. Yet public opinion had stayed with the Government.

That was because the public “is reasonably well satisfied with what we are doing,” he said. National was the only party which had support across the whole spectrum of society and the experience needed to govern the country. The Labour Party was its only Opposition, but it had no real policies. “Labour basically only has one policy. They oppose everything we do and say yes to every pressure group,” Sir Robert said.